Litigating Through Chaos: Asset Recovery Amid War, Sanctions And Trade Disruption

With the accelerating pace of globalization, financial systems and commercial networks have become deeply interconnected, allowing illicit financial flows and transnational crimes to evolve in both scale and sophistication. This growing complexity has compelled states to strengthen cooperation and harmonize their legal frameworks, making international conventions and cross-border enforcement mechanisms increasingly visible and essential components of global governance. Over the past two decades, the concept of "asset recovery" has become a cornerstone of international legal practice, shaped by conventions such as the United Nations Convention against Corruption ("UNCAC"), the Palermo Convention on Transnational Organized Crime, and binding United Nations Security Council resolutions on terrorism and weapons proliferation. International standards from the Financial Action Task Force ("FATF") further require states to criminalize money laundering, treat terrorism financing as a separate offence, and ensure that proceeds of crime and related unlawful gains can be confiscated and returned.

Asset recovery refers to the process of identifying, tracing, freezing, and ultimately securing assets, whether unlawfully obtained (such as proceeds of corruption, fraud, or other criminal conduct) or lawfully acquired but targeted for enforcement of a judgment or arbitral award. It encompasses both public-law mechanisms aimed at the return of illicit assets and private-law strategies designed to secure legitimate claims.

Globally, courts and enforcement authorities now rely on a diverse toolbox in order to establish a more effective asset recovery process. Some of these tools include provisional injunctions to prevent dissipation, freezing and seizure orders, mutual legal assistance between states, and recognition and enforcement of foreign judgments and arbitral awards.

However, despite these advances and tools for more effective cooperations, asset recovery still remains a complex matter for a variety of reasons. Assets often move across borders at high speed, hidden through layered transactions or placed under third parties' control. This makes timing and procedure critical: interim relief must be obtained quickly, cooperation with foreign jurisdictions must be coordinated efficiently, and enforcement strategies must be tailored to each case. What has emerged is a clear principle recognized worldwide: without robust asset recovery mechanisms, sanctions, court judgments, and anti-corruption measures risk being rendered ineffective. This article examines the mechanics of the asset recovery process in Türkiye and explores how the country's increasingly sophisticated arbitration culture and practice contribute to that framework.

How Asset Recovery Operates in Türkiye

Asset recovery in Türkiye functions through a dual framework: criminal law tools for illicit assets and civil law mechanisms for legitimate claims against lawfully obtained assets.

Freezing and Confiscation of Illicit Assets

When corruption, fraud, or systemic breakdowns threaten assets, the first priority is preventing dissipation. Turkish law provides prosecutors with strong tools: courts may order the freezing of bank accounts, sequestration of property, or precautionary liens (elkoyma) during investigations. Upon conviction, courts may confiscate (müsadere) assets proven to be either proceeds of crime or instrumentalities used in the offence.

Türkiye's regime is embedded in global cooperation. As a signatory to UNCAC and participant in the FATF framework, it executes foreign requests to trace and freeze assets under mutual legal assistance treaties. In line with EU commitments, Türkiye is working toward a national Asset Recovery Office (ARO) to coordinate domestic agencies and streamline cross-border seizures.

Specialized laws strengthen this system in sensitive areas: Law No. 6415¹ (terrorism financing) and Law No. 7262² (weapons of mass destruction financing) allow immediate freezing of assets. Articles 127–128 of the Turkish Criminal Procedure Code³ require judicial oversight and coordination with regulators such as the BRSA, Capital Markets Board, Treasury, and MASAK.

MASAK is central in practice. It collects financial intelligence, exchanges data with foreign FIUs, and can postpone suspicious transactions for up to seven business days under Law No. 5549⁴—a vital safeguard when funds are at risk of flight.

Civil law remedies supplement the criminal track: injunctions (ihtiyati tedbir) and pre-judgment attachment (ihtiyati haciz) allow private claimants to block transfers and preserve assets even outside criminal proceedings.

Amid war, sanctions, and trade disruption, these tools make Türkiye a credible jurisdiction to freeze and confiscate unlawfully obtained assets before they vanish.

Enforcement of Arbitral Awards and Foreign Judgments

For lawfully acquired assets, Türkiye is an arbitration-friendly and enforcement-supportive jurisdiction. It ratified the New York Convention in 1992 with standard reciprocity and commercial reservations, which rarely obstruct enforcement. Most international disputes qualify as "commercial," and most relevant states are contracting parties.

Under Law No. 5718⁵, foreign arbitral awards must be final and binding before enforcement. Courts may refuse enforcement of arbitral awards only on the limited grounds under Article 62 of Law No. 5718 or Article V of the Convention (e.g., invalid arbitration agreement, lack of notice, excess of authority, non-arbitrability, or public policy).

In recent years, Turkish courts have adopted a more arbitration-friendly approach, interpreting "public policy" narrowly, rarely refusing enforcement in commercial disputes. They are barred from re-examining the merits, reflecting a strong pro-enforcement approach.

Foreign judgments are also enforceable under Law No. 5718, subject to reciprocity and public policy review as well as other limited grounds for refusal of enforcement. In practice, courts apply these requirements pragmatically, with growing consistency.

Together, these features make Türkiye a predictable jurisdiction for converting judgments and awards into recovery, even when sanctions or politics complicate enforcement elsewhere.

Arbitration in Türkiye as a Gateway to Recovery

Arbitration is often the precursor to asset recovery, and Türkiye offers a modern, reliable framework. The International Arbitration Law of 2001, modeled on the UNCITRAL Model Law, ensures international standards and party autonomy. Courts defer to arbitration clauses and intervene only to support proceedings—appointing arbitrators, ordering interim measures to preserve assets, or assisting in evidence gathering, as the case may be.

Türkiye's arbitration institutions, including ISTAC and ITOTAM, operate under internationally recognized rules and offer modern procedural tools—English-language proceedings, emergency arbitrator relief, and fast-track options, if chosen by the parties. This openness reinforces Istanbul's role as a hub for cross-border dispute resolution and ensures that parties have credible alternatives when other arbitral venues are constrained by sanctions or political pressure.

Practical Illustration: A creditor with an arbitral award against a debtor in Türkiye may seek interim relief even before enforcement—freezing bank accounts, blocking share transfers, or placing liens on real estate. Once recognized, the award can be swiftly converted into execution proceedings, turning a paper victory into real recovery.

In practice, arbitration—whether seated in Türkiye or abroad—offers creditors a direct and enforceable path to assets located in Türkiye. Combined with the country's pro-enforcement stance and relatively open posture amid sanctions, arbitration is a powerful tool for asset recovery in turbulent times.

Taken together, Türkiye's dual-track system of criminal, civil, and arbitral remedies ensures that assets—whether unlawfully obtained or lawfully held—can be effectively pursued and recovered, even amid global disruption. This dual framework underpins Türkiye's broader advantages as a venue for asset recovery, a point examined in the following section.

Benefits of Choosing Turkiye For Asset Recovery

Neutrality in Sanction-Heavy Disputes

Türkiye's balanced diplomatic stance allows it to maintain ties with multiple sides in international conflicts while avoiding the unilateral adoption of sanctions. This pragmatic neutrality translates directly into legal practice: Turkish courts and enforcement offices have not developed a habit of rejecting claims, refusing recognition, or obstructing enforcement merely due to a party's nationality or political affiliation. Nor have they adopted automatic seizure measures in response to broader geopolitical tensions. Similarly, national arbitration institutions—most prominently the ISTAC—have continued to accept disputes arising from jurisdictions affected by sanctions without imposing restrictive practices. This approach, contrasting with the more conservative stance of certain Western arbitration centres, positions Türkiye as one of the few jurisdictions where asset recovery proceedings can continue in a rules-based yet relatively flexible legal environment.

Banking Compliance Challenges

While the judicial and arbitral processes remain accessible, practical obstacles may arise at the payment and collection stages due to banking compliance. Some Turkish banks apply stricter due diligence in transactions involving sanctioned persons or entities, which can cause delays or refusals in cross-border transfers. Creditors are, therefore, advised to conduct pre-enforcement due diligence on payment channels. Nevertheless, compared to jurisdictions where sanctions directly bar enforcement, Türkiye offers relatively greater flexibility and fewer systemic barriers.

Strategic Enforcement Opportunities

While Türkiye offers a pragmatic and relatively predictable framework for enforcement, its approach should be understood as a measured autonomy rather than disregard for international norms. Türkiye consistently upholds its treaty obligations and recognizes the importance of global compliance mechanisms, yet it also exercises sovereign discretion in determining the domestic implementation of foreign sanctions or restrictions.

This calibrated stance allows Turkish courts to maintain the integrity of due process while avoiding undue interference with legitimate legal claims. As a result, enforcement proceedings can progress in Türkiye even when other jurisdictions encounter procedural impasses — not because Türkiye overlooks international principles, but because it ensures that such principles are applied within the boundaries of its own legal order.

Accordingly, creditors holding enforceable judgments or arbitral awards abroad may find Türkiye a strategically advantageous forum, particularly where assets are situated within its territory. In drafting cross-border contracts, parties may therefore consider Türkiye not only for its judicial efficiency but also for its balanced and principled approach to enforcement in complex geopolitical contexts.

Conclusion

Against the backdrop of war, sanctions, and trade disruption, Türkiye offers creditors a rare blend of neutrality, modern arbitration infrastructure, cost efficiency, and openness to enforcement. While banking risks must be managed carefully, Türkiye stands out as a practical, reliable, and strategically advantageous venue for asset recovery in a fragmented global landscape. By leveraging Türkiye's unique position, clients can maximize their prospects of securing assets effectively and with greater certainty in an uncertain world.

Footnotes

1. Published in the Official Gazette dated 7 February 2013 and numbered 28561.

2. Published in the Official Gazette dated 27 December 2020 and numbered 31351.

3. Published in the Official Gazette dated 17 December 2004 and numbered 25673.

4. Published in the Official Gazette dated 11 October 2006 and numbered 26323.

5. Published in the Official Gazette dated 27 November 2007 and numbered 2672.